Why I Loved Jamie Webster's EIA Presentation

The annual EIA conference has increasingly become more optimistic in recent years since Adam Sieminski took over as administrator in 2012. Long gone are the days where 600 people showed up for a Peak Oil session at the 2008 EIA conference - a session the EIA felt complelled to hold as a response to the 2007 GAO report: "Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing a Peak and Decline in Oil Production"

And in an already optimistic conference, Jamie Webster of IHS had the single most optimistic presentation: "Going Global: Tight Oil Production"

I don't agree with Webster's talk, but I'm thrilled that he made it. Optimists in the Peak Oil Debate frequently employ misinformation and strawmen or other tricks to dance around and avoid discussing the only issue at hand: the future rate of oil production

Long-story short, if you're an optimist in the Peak Oil Debate then your position is that the rate of worldwide oil production will at worst continue on a plateau and at best continue to increase. 

So they are making one or more of the following three (or four) arguments:

  1. Conventional oil production will stop declining or increase. While growth in unconventional oil gets all the press, conventional oil has been a disaster worldwide. Making a call for conventional oil growth is a very tough argument to make and not many do. But if they refuse to hang their hat on this point, then they are asking unconventional oil to not only increase tremendously, but increase so much that it also covers the continued decline in conventional production.
  2. The U.S. tight oil boom will continue its remarkable pace. Many predict that - due to steep decline rates and financial challenges - the wheels will start to come off of the U.S. boom in a couple of years. Growth will slow, production will reach a peak and then decline. That's not exactly a radical position. But the true optimists have to believe that this inevitable peak is many years in the future as opposed to just a couple of years.
  3. Global tight oil production will follow the U.S. template. This is a big one, and the main point of Webster's talk. An optimist has to believe that the "U.S. oil miracle" can be easily and quickly cut-and-pasted to countries around the world. This is much easier said than done. And many doubt it will happen. Even Leonardo Maugeri doubts this possibility in his paper "The Shale Oil Boom: A U.S. Phenomenon," where Maugeri argues that drilling challenges, combined with geologic and legal challenges make it difficult to replicate the U.S. boom globally.
  4. A potential fourth argument might be "Peak Oil Demand." Where the optimist admits that the rate of oil production will peak and decline, but this won't matter as much for a variety of reasons.

An optimist in oil must boldly make one or more of those arguments. And if they are busy telling you that the Peak Oil pessimists are wrong, while NOT talking about the future rate of oil production - then this is a problem and you need to hold their feet to the fire until they do. 

But Webster absolutely sticks his neck out in his talk. And that takes courage and conviction. He might be right, he might be wrong, but at least he directly tells you where he stands, something of an unfortunate rarity in these discussions.